Conventional loans are built for stable properties and slower timelines.
Hard money is built for speed, flexibility, and value-add projects that banks don’t like.
The right choice depends on property condition, timeline, and your exit plan.
If you need to close fast or renovate heavily, banks often become the bottleneck.
If your property is stabilized and your timeline is relaxed, conventional pricing can be attractive.
Use this framework to choose the tool that matches the deal, not your preferences.
At a glance
- Conventional works best for stabilized, financeable properties
- Hard money works best for speed and properties that need work
- Exit strategy determines the right financing tool
- Underwrite the timeline; speed often changes the entire deal outcome
- “Cheaper money” that misses the deal is not cheaper
- Many investors use hard money first, then refinance into DSCR [Debt Service Coverage Ratio]
When conventional financing is the better fit
Conventional financing tends to fit when:
- the property is in good condition and qualifies for standard appraisal/underwriting
- you have time to meet documentation requirements
- your plan is long-term hold with stable cash flow
- you are not relying on a heavy rehab to create value
- you want lower cost of capital and can tolerate slower processes
When hard money is the better fit
Hard money tends to fit when:
- you need speed to win the deal (tight seller timeline, competitive offer)
- the property needs renovations that make it hard to qualify conventionally today
- you are executing a fix-and-flip or value-add strategy
- your plan is to stabilize then refinance into long-term debt
- you want deal-first underwriting focused on collateral and exit
The investor decision framework (simple and practical)
Ask these questions in order:
- Does the property qualify conventionally today?
If no (condition, occupancy, title issues, unusual assets), hard money often fits. - How fast must you close to win?
If you need speed, hard money is often the right tool. - What is your exit?
- sell after rehab → hard money often fits
- hold long-term with stabilized rent → conventional or DSCR may fit better
- Will delays destroy your profit?
If yes, choose reliability and speed over a slightly cheaper rate.
The common winning strategy: hard money → stabilize → refinance
A common investor workflow is:
- buy and rehab using hard money (speed + flexibility)
- stabilize (finish rehab, lease, improve operations)
- refinance into DSCR [Debt Service Coverage Ratio] or other long-term financing
This matches capital to the phase of the project.
Next step
Hard money program: https://ambitionlending.co/hard-money-loans/
DSCR refinancing path: https://ambitionlending.co/dscr-loans-for-investment-properties/
Submit a deal: https://ambitionlending.co/contact/
Frequently Asked Questions
Is hard money always more expensive than conventional?
Typically, yes on headline pricing, because it is faster and more flexible. The real question is whether the speed and certainty improve your total return and deal win-rate.
When should I avoid hard money?
When the property is already financeable, your timeline is flexible, and your plan is a long-term hold where lower long-term cost matters most.
Why do banks dislike distressed properties?
Why do banks dislike distressed properties?
Can I buy with hard money and then refinance conventionally?
Often, yes, after the property is repaired and stabilized. Many investors refinance into DSCR [Debt Service Coverage Ratio] loans for rentals.
What matters more: lowest rate or fastest close?
It depends on the deal. If speed wins the acquisition or prevents margin-killing delays, fast and reliable can outperform “cheap but slow.”
How do I decide quickly?
Start with property condition, closing deadline, and exit strategy. Those three factors usually answer the question.
